ASSIGNMENT OF BUSINESS ENVIRONMENT

INTRODUCTION OF BUSINESS ENIVIORNMENT

The factor that affects how the company functions includes the stakeholders and business
regulations. We study business environment for:

Developing of low broad strategies.

To be aware of strength, weakness, opportunities and
threats.
To keep oneself high-powered.

There are two types: Internal Environment and External

Environment.
Internal Environment happens inside an organization which causes the weakness of nature. They
can execute them self. External Environment happens outside an organization which provides
opportunities. They are consisting of Micro and Macro environment.

1.1
Next war will be same as the past years. Because
almost all of us expect the future to be a repeat of the
past and this same mistake often make problems
even the highly trained business. But the world we
live in now has changed, people came to know about
past year business so they started to bring up new
business tactics. Todays world brought up cheap and
powerful computing technologies, combined with new skills for engaging the customers in
arguments over the internet have dramatically transformed to business competition.
Mobility, Globalization, Technology etc. are the transformation of Business Environment during
last decade. The process of transferring an organization from national market to an international
market is called Globalization. In todays world the globalization has developed compare to last
decade. For example of mcDonalds; for nearly a decade, McDonalds same store sales were
going on upwards. But suddenly in 2012 declaration were hit by their symbols. The company
mistaken last year by bringing four new product in menu. And they brought new changes in past
years to restore there lagging business and for bring up a good image on public. The new CEO
started removing some of their foods from menu and brought new one. It was launched a
massive marketing goals to answer their customers who concern about food. So he started to
downgrade their old products and upgrade new products for a better marketing and business.

In Business Environment over a decade the technology has changed and reformed in their
operation such as Web conferencing, Crowd sourcing, Cloud computing and Telecommuting.
Web Conferencing: A system in which people use to communicate each other by multiple user
computer such as Motion video, Skype softwares etc.
Crowd Sourcing: The social medias such as facebook, twitter etc are the Crowd source. It is an
organization where we get data and information from a large crowd or who are across the globe.
Telecommuting: When a person work in office or in home use telephones for sharing and
communicating each other in easy and fast way.
Cloud Computing: In order to publish datas in online, resources on a network of remote server
which stores and manage the datas such as software and applications.
Todays world the business is moving from one place to
another place by business meetings, marketing and
delivering their goods and services to other countries
through transportations like airways, waterways etc is
called Mobility. A hybrid organization is mixed of value
system and logics of various sectors of society such as
Private sector, Public sector and Voluntary sectors
(Corporations).
Private Sector: - The individual or group of persons who
are working for their profits and they are not controlled by
any government. These individuals or groups are called the
shareholders and also they share their issues. 50
shareholders are the maximum number required to setup a
private sectors. Ex small owned business, multinational
corporations etc.
Merits of Private Sectors:

Liabilities are limited for shareholders.

Increasing the capitals by increasing the number of shareholders.
Opportunities for business growth and expansion.

Demerits of Private Sectors:

There is limited growth in private sectors because of limited shareholders.

Shareholders cannot sell or transfer their shares without getting an agreement from
another shareholder.

Public Sector: - It is the part of economy that is controlled by governments and state. It is
usually owned by the shareholders and their purpose is to increase their capital from the public
using stock exchange market. Ex Tesco, Prison service etc.
Merits of Public Sectors:
o Capitals can be increased from public.
o Public sectors can have more than 50 shareholders which means unlimited.
o Shareholders can transfer or sell their shares freely through stock exchange market.
Demerits of Public Sectors:

Strict regulations are need from governments for starting a public sector.
More legal formalities required which consume lot of time.

Voluntary Sector: - These is the third sector, we can also call them community sector or non
profit sectors. There duty is undertaken organizations that are not governmental for social
activities. They wont do any operations with intension of making profits themselves, but they
aid individuals or groups who might need. Ex: emergency medical, charities etc.
Partnerships: Two or more people come together to setup a business organization with same
aim and owned by an individual who put their money and other resources to setup a business. A
Partnership business is to increase the profits and for expanding their business internationally.
1.2
There are different interest group for stakeholders in Microsoft,
who makes decision and ideas for their projects. In Microsoft there
Internal and external stakeholders:-

are

Internal Stakeholders of Microsoft are the individuals who

dedicated in providing service and having a direct influence. The
internal stakeholders consist of Shareholders, Employee and Project
Managers.
Shareholders: In Microsoft there is an individual and a group who owns the share of
company. Only one shareholder can be allowed for company in legally. Microsoft
shareholders always interested in capital growth and their divided shares. They can make
decision for the growth of company and its business.
Employee: They are hired to provide services for Microsoft on a regular basis in
exchange for compensation and they do not provide their service for independent
business. In Microsoft the employees are interested to work because they give high
security and more wages compare to a local company. These stakeholders can only get
soft copies of their project, they are not allowed for hard copies.

 Project Managers: Stakeholders who need the information to assist the project in all
stages of Microsoft. They get information or data from planning, manage resource and
the result of that project. In Microsoft, if they found any error on the information soon
they will add or remove data. They also use more special reports for solving the particular
project errors.

External Stakeholders are the secondary stakeholders and they are indirectly a part of
Microsoft Organization. They deals with Microsoft externally, but do not have a regular
contact. The external stakeholders are consisting of Customers, dealers and suppliers, and
Trade Union.
Customers: are the key stakeholders for whom the Microsoft product is giving out.
They are allowed to know the product report and product cost which includes the
features and size of product. In Microsoft, the customers are consider and treated as
the king of stakeholder. Customers can rate the product by accessing and other
features like size, colour, sensor etc.
Suppliers: For Microsoft, there are two different suppliers. The raw material
suppliers and the finished product suppliers. The raw material suppliers who brings
all the raw materials which is required in Microsoft such as speakers, phone body,
application other than Microsoft apps etc. The finished product suppliers who delivers
the product to wholesalers or retailers in market. These suppliers are focusing on their
success, stability and benefits of the product. They can even change the cost of
product for their profits and upgrading their business.
Trade Union: In Microsoft, there are workers who work to protect their common
interest and ensuring job opportunities as well as security. In case of fire in company
these trade union helps Microsoft to recover and will keep the company safe.
The extent to which an organization meets the objectives of different stakeholders
There are so many companies suffering from poor relationship
with their stakeholders. Microsoft, one of the worlds largest
company. They have been also known as one of the best example
of a networked company that develops on its stakeholders
relationships. They are now running into trouble with some of its
other stakeholders the public, investors, government regulations
and employees. There are more than one hundred anti-Bill Gates
and Microsoft sites on the internet. The Microsoft Company is
making the workers to do more works for long hours. It was
difficult to recruit new highly skilled workers for the company.
They have been succeeding in their relationship, but strength of
that relationship was poor because of their unethical business.
Microsoft has different stakeholders which meets the objectives to extent.

 Shareholders: In Microsoft there are two individual investors Bill Gates and new
shareholder Ballmer. Bill gate holds the main share of Microsoft so he provides risk
capital for him and are interest in the capital growth. Other shares are equally divided and
given respectively to those shareholders.
Employee: They are the sub-coordinators and the managers of Microsoft organization.
These managers and sub-coordinators work for Microsoft and they provide more effort
for company growth. Microsoft provides them good facilities for work and they provide
security and payments without any delay. Microsoft also provides transportation and
accommodation for their employees which attract more employees to work in Microsoft.
Customers: They buy the Microsoft product and use it with all Microsoft features.
Microsoft make customers satisfy by good quality, affordable prices, and guaranty for
their products. Also they make valuable and easy for customers.

Suppliers: Microsoft has two stakeholders in suppliers. The raw and finished materials.
In raw materials the Microsoft will say them how to bring the materials and when to
export the materials. In finished products the Microsoft will decide a price which is
discussed between the shareholders and then they will say how to sell the product or
when to sell the Microsoft product.

1.3
In Microsoft, they are having different goal or different projects upcoming. In that one of the
main goals is THE ENVIORNMENTAL CHALLENGE.
Todays world is moving with technologies and other new
inventions, so they need more electric as well as other energies.
And we are having less energy efficiency for our technologies.
As we know our planet is eco-friendly and they can be used
easily. Microsoft brought up clean eco system in which IT tools
and software empower to increase the energy efficiency and to accelerate the innovation.

Then they brought wind power project, which Microsoft had signed the terms and agreement for
wind energy such as Keechi wind project (KWP). These projects were for their global
commitment to transform the energy supply chain.

Microsoft having great strategies of:

Today social networks, mobile computing is helpful for peoples to their success. So
Microsoft continuous their longstanding commitments and leadership of developing
innovations.

Microsoft is easy to use and they provide us to hear, see and launched window 3 with a
streamlined graphics. The latest version of Microsoft windows is Windows 10 with all new
features.

They collaborate with other organizations and

make a strong relationship. Example Microsoft
entered the OS business in 1980, and they
launched own version called Xenix. After xenix
arrival they started new project and they failed on
that project, so Microsoft collaborated with IBM.
Then IBM started helping the Microsoft for better result.

2.1

Traditional Economy It built upon tradition,

customs and belief in developing goods and services.
They are based on agriculture, hunting, gathering and
fishing. Instead of money they use the trade as
exchange of goods or which is having equal value to
money. Traditional economy wont store goods, they
use most of their goods and service fully. The people
in traditional economy lives as family or tribes.
Merits of traditional economy:

In traditional economy they can easily understand what job is or what they suppose to do.
And also they can understand what they will get when they do their job.
Less destruction to the environment, it is because of tradition economy farm.

Demerits of traditional economy:

If they fail to find animals for hunt, they cant survive in traditional economy.
If the farms are not effective the traditional economy decrease due to more destruction.

Command Economy Give orders or give powers for

financial management which is done by
government/state. The price of goods is controlled by
the state or government, and they take all decisions in
financial management.
Merits of command economy:

Demerits of command economy:-

In command economy the government

distributes the salary and they pay on time.
Health care service and other needed service are
low or free in command economy.

The government has poor ability and information about what to produce.
They cant respond properly to consumers preference.

Market Economy It includes production,

investment, and distribution. They are based on
supply and demand of goods, in this economy there
is a producer and a consumer who decides how to
utilize the goods.
Merits of market economy:

We can have competitive in market

economy for market development and lead
to a good business economy.
In market economy more availability of
goods and service.
And there are more job opportunities.

Demerits of market economy:

In market economy there is no social security, insurance etc.

Health and safety cost lot of money compare to government economy.

Mixed Economy A mixed economy consists of traditional and

market economy because in mixed economy we can control owning,
making, selling and exchange of goods. Both private and government
have same power for making decision.
Merits of mixed economy:

Demerits of mixed economy:-

Government helps the mixed economy when the market

decreases.
When there is a competitive the price decrease.
The states help in health and make the cost low.

Taxes for government.

Over controlling of business can add more cost to mixed economy.

2.2
Fiscal and Monetary policies have the same target
in
growing economy, but they use different path.
Monetary Policies supply money to the nation and
they are controlled by central banks. Example
India having there central bank as Reserve Bank of
India and France having there central bank as Bank
of
France. When central bank changes the supply of
money the monetary policies arises. Fiscal policies
are
the government/state spends money from their budgets and when they transfer payments the tax
increases in government. Fiscal and Monetary Policies use their own tools and try to improve the
economy conditions, but they take a lot of time working on it. And due to recessions a policies
lag between the time and economic problem arises. The politician thinks that fiscal policies are
the business strategy for country, but it nothing like a business because government doesnt earn
anything. The government/state takes money from people in the form of taxes, its for the people
and the society needs.

Lets meet Peter. Peter is a businessman who has been around economy and he has seen every
part of the business cycle. He has seen the growth of economy and economy contract from a
point to recession. We all think that business cycle is like roller coaster and he watched the
government try to wipe out everything from business cycle through fiscal and monetary policy.
In India, the government wants to increase growth in the economy because it will increase the
demand of goods and services therefore demands increase, production goes up. When the
production goes up the companies may hire more employees and unemployed can have jobs and

money to spend on goods. This will increase the demands and production so hopefully the cycle
will continue its growth.

The government gets overheating in economy or growing too fast may lead to decrease in
spending goods and services. When it decreases the overall economy demands also decreases.
This affects the businesses to slow down production which makes lot of loses in business
investments. By raising the taxes government can slow down overheating economy. The people
will have less money in their pocket, and less demand.
Peter setup a store and he came to know about fiscal policy
taxes. When the tax decreases it tends to increase the economic
growth. And according to Peter, when the taxes go Peter will
have more money in his pocket. He can either save or spend the
money and if he spends the money, he will increase demand of
goods and produce more. On the other side if he save the money,
he will put it in his bank as deposit and the borrowers will take it
as loan from bank. The government creates a crowding effect by
spending and reduction in taxes. They borrow money from other
regions if they dont have enough money support for spending.

2.3
Policy set by the government in promoting competition among market and improving economic
efficiency in individual markets. These policies to maintain competition by government, stopping
monopolies market power. The Competition Policy consists of elements such as public education
resources and other campaigns.
Competition Policy includes:

Innovations which promotes efficient dynamics in different.

Effective price competition between national suppliers.
Promoting the interest of consumers.

Antitrust:
Laws that stop the abuse of power, companies that hold a dominant position tries to fix high
prices to squeeze other competitors out of the market. The Antitrust are used to ensure that

agreement in the marketplace does not restrict competition and its not unfavorable to the
society.

Merger Control:

A Laws in which the government uses to investigate merger formal agreements between
firms either temporal or permanent. This is to ensure that the post-merger between two large
firms does not result in monopoly.
Market Liberalization:
The introduction of fresh competitions in previously monopolistic industries removing
barriers and restrictions on areas including telecommunication, transport, energy, postal
service and retail banking, etc. that have been managed and controlled by the state. This is
particularly essential in order to give advantage to the Single Market.
Competition policy is a basic mechanism of
economy which encourages Microsoft to offer
consumers goods and services. Microsoft one of
the most valuable and leading companies in the
world and its CEO Bill Gates, the worlds
richest man. They found a commission that
abused its monopoly of PC Operating System
(OS) in two different ways: giving restriction
between windows PC and non-Microsoft group
server.
Microsoft faced competition among their product with windows operating system. When they
launched windows media player in OS, there were a large competitive between other media
players such as VLC, MX player, GOM players etc. Then Microsoft brought major demands,
including compulsory license for their product. Microsoft has longstanding monopoly
competition because the customers use Microsoft application for several needs example:
Banking, Database management and other leading apps.

3.1

Microsoft is a monopoly, they doesnt sell only one product in market do have more goods and
services. Take case of operating system, it is a far dominant today in market. Operating system
(OS) requires at least 95% share of market, it is not technically monopoly but the market show
the most of them are monopoly. Even they try to sell other product to the market economy
example Bing search engine. Bing search engine is not a monopoly comparing to other
competitors such as Google, Yahoo and few other. In Microsoft there are several types of
combination in monopoly: Process of smart decisions in business.
Some business tactics which is done by the company employ, because they want to
become market leader.
Competitors mistake.
Oligopoly is the small number of sellers who are included inside a oligopoly market structure.
They always require strategic thinking and unlike prefect competition and monopolistic
competition. If the seller is a monopoly, he doesnt worry about how other sellers will react.
Cooperation and self-interest always produce tension for oligopoly.
They are depending on: Profit maximization and Seller maximization.
Entry barriers.
Regulation of government.
Perfect Competition It is a market with buyers and sellers. All sellers sell identical units of a
product with no controls in price by an individual. There are large number of buyers and sellers
in a perfect competition. Buyers are having knowledge or aware of price prevailing in the
market. The sellers dont have any agreement regarding the production and the sales. They
always move to the industry where they get the goods for best price.

Monopoly- It is a form of
market where there is a
single seller of product with a
large amount of buyers. If we
take an example of India, the
railways are monopoly
industry of government. There is no close substitute in railways
of India. A monopolist has full control over price in his product and he can fix any price for his
product. There are demerits and merits for monopoly.

Demerits:

Less output
High price
Economic concentration.

Merits:

High level of development and research

High level of skill and efficiency.

There are some features for Monopolistic Competition

3.2

No price competitions.
We can increase monopolistic competition by lowering the prices.
Lack of perfect knowledge.
There is no perfect mobility for goods and services.
Large number of buyers and sellers.
Large number of close substitutes in market.

Marketing to consumers, supply and demands are the way

affected organizational market forces. The availability of
goods and services in a market within a large amount is
called supply. Market wants number of goods and services,
it is called demand. For example: Microsoft introduced new
software to market, the supply of software is greater than the
demand of software. So, Supply and demand having
different or opposite relationship in market. Both are
measured by price, if there is more demand in market then
there is more supply of goods and services.
Impact of supply and demand:

Rivalry degree.
Substituting the old treats.
Customers having several powers.
New entry of likelihood.
Suppliers power.

Before 1990, Microsoft was the only supplier to hardware manufacture but after 1990 several
companies income increased by sales to consumers. That year Microsoft income came $1 billion
and they became the first software company to reach the highest revenue.
In Microsoft, they have some demand planning:They use sales history for future usage.
They having user defined planning inside their group on any level.
Microsoft has a capacity to maintain their unlimited version.
User defined with combination of levels such as product, customers and territory.
2003, Microsoft employed approx. 5500 people in 85 countries and
regions. They declared bargaining agreement for the company
employees in 2001. They invest significant resources in:

3.3

Establishing their windows in every PC, Tablets, Mobile Phones, Server and increasing
their product value in market.
Building and running a cloud service in new experience.
Opportunities for businesses and individuals in market.
New high value services with improvement in how people work, play and learn each
other.
Developing new software will access the people in an easy way.

Behaviors, attitudes, value and aspiration of people

is a shape of environment, it is very important to
understand a cultural environment. Cultural
environment helps us to understand the customers
of a particular state/region. And also they help us
to understand the behavior of customers in
environment. The political factors, microeconomic
factors, macroeconomic factors and social factors
are the external factors of business environment.
Employees, assets, company product and
marketing are the internal factors of business environment. Self-service are very helpful for
current business environment such as mobile banking, text alert, and online billing. A strategic
tool of business environment is business analysis. It is a process of finding the problems which
are facing by external and internal factors in an organization. Every day our market change,
many new product launch and within a few seconds the market changes.
Political Factors: - The country has political situations in market and it is controlled by political
factors. This factor even helps in global political condition which affects the country and
business. There are some factors under political factors:o
o
o
o

Policies of government.
Government stability in market.
Regulation of entry mode.
The taxes law.

Economic Factors: - All the determinant of economy is involved in economic factors. They
always led the direction in which the economy moves and also help in setting up strategies in
economy. The factors under the economic are:

Rates of interest and inflation.

Fiscal and monetary policies.
Rates of unemployment.
Accessibility of credit.
Rates of foreign exchanges.

Social Factors: Distinctive mindset of every country is varying from each other and their
business has an impact based on these attitudes. They affect the sales of goods and services in
market. There are some factors under social:

Implication of cultural economy.

Lifestyles of social.
Distribution of domestic structures.
Levels of education and wealth.

Technological Factors: Technological factors influence the business in advance and they will
help us to stay up to date when the market changes. Technology always makes change in every
minute. So, companies should stay connected all the time. They also help us to know what the
consumers react to trends. There are some factors under technology: Launching and discovering new products to market.
Technological rates.
Innovation of technology in market platform.

Microsoft was often known as the aggressive culture in cultural environment. They have been
faced a number of antitrust problems and competitors over the year. Usually in aggressive
companies, they use different languages and different behaviors such as we will destroy our
competitors Microsoft brought up a statement that they are going to cut off the Netscape air

supply. Everything they are selling, we just give up. Aggressive culture is cited as a reason for
new legal troubles for Microsoft. The biggest and the strongest assets are the organization
culture. It is hard to imitate culture organization and more competitive advantages.